Natural Gas and the Dangers of Swing Trading Leveraged ETFs
Thinking that the war in Ukraine would cause the price of natural gas to surge higher over the winter, many traders got stuck on the wrong side of a trade. Natural gas futures have plunged more than 90% over the winter.
In this video, I explain that regression analysis was warning that a significant price decline was imminent in late 2022, and I explain that it is now suggesting that a bounce in natural gas prices may soon occur. This video also explains the pitfalls that many novice traders experience when trying to swing trading leveraged ETFs that employ derivatives and which undergo volatility drag over time.
Here is the link to the risk-reward / win-ratio spreadsheet that is referenced in the video.
docs.google.com/spreadsheets/d/1KipB9PwQmPBxMMeqv6ylB3zr7Ic5HHILSp1xyCNUQGg/edit?usp=sharing
Shared with permission from HeWhoMustNotBeNamed
Note for stats nerds: The log-linear regression channel indicator does not give negative numbers for the Pearson correlation coefficient (r). The indicator gives the absolute value of the Pearson correlation coefficient |r|. So if the correlation is strongly negative or strongly positive, it will appear near 1 in both cases.
Important Disclaimer
Nothing in this post should be considered financial advice. Trading and investing always involve risks and one should carefully review all such risks before making a trade or investment decision. Do not buy or sell any security based on anything in this post. Please consult with a financial advisor before making any financial decisions. This post is for educational purposes only.
In this video, I explain that regression analysis was warning that a significant price decline was imminent in late 2022, and I explain that it is now suggesting that a bounce in natural gas prices may soon occur. This video also explains the pitfalls that many novice traders experience when trying to swing trading leveraged ETFs that employ derivatives and which undergo volatility drag over time.
Here is the link to the risk-reward / win-ratio spreadsheet that is referenced in the video.
docs.google.com/spreadsheets/d/1KipB9PwQmPBxMMeqv6ylB3zr7Ic5HHILSp1xyCNUQGg/edit?usp=sharing
Shared with permission from HeWhoMustNotBeNamed
Note for stats nerds: The log-linear regression channel indicator does not give negative numbers for the Pearson correlation coefficient (r). The indicator gives the absolute value of the Pearson correlation coefficient |r|. So if the correlation is strongly negative or strongly positive, it will appear near 1 in both cases.
Important Disclaimer
Nothing in this post should be considered financial advice. Trading and investing always involve risks and one should carefully review all such risks before making a trade or investment decision. Do not buy or sell any security based on anything in this post. Please consult with a financial advisor before making any financial decisions. This post is for educational purposes only.
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